So, if I got this right, celles-la mean those (ones there). What is the difference in using ce sont petits in this context? Or can it be cela?
I thought I had this entire concept, but now I am confused

Ce means this or that. Ceci is a combo of [ce + ici] (this here) and cela a combo of [ce + là] (that there).

I forgot to answer your other question. There is not much difference in meaning with ce sont petits except it does not specify if you mean these or those. Also celles/ceux really mean these ones or those ones. I am not sure but I believe you can uses cela in place of ce in ce sont petits to mean those are small.

ETA: Ignore that last statement. See Sitesurf's comment below. I should have known better because I know cela means "that" so is singular.

Celles means "these ones" or "those ones". Celles-là means "those ones", indeed, but in English, you can drop "ones" and just say "those" and it still means the same thing.

This has been explained a few times in the discussion--a fact you would have known if instead of rushing to post whenever you have a question, you read the discussion first. Please make it a habit to read first to avoid redundant questions.

If you back translate your proposal, you get: "celles-là sont les petites", ie with "petites/small ones" as a noun, not as an adjective and with a definite article (les/the), which were not meant in the original sentence.